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The main point of contention before the Apex court was as to whether a family arrangement “Kharurunama” which only put forth the arrangement arrived at between the brothers was compulsorily registrable or not under section 49(1)(a) of the Registration Act.

Family Arrangement (“Kharurunama”) which merely particularizes the arrangement will not be compulsorily registrable if it doesn’t by itself creates, declares, limits or extinguishes rights in the immovable properties, held Supreme Court in a recent judgment.

A division bench of Justices KM Joseph and SR Bhat  while setting aside the High Court’s judgment and allowing an appeal observed that,

“If we apply the test as to whether the Khararunama in this case by itself ‘affects’, i.e., by itself creates, declares, limits or extinguishes rights in the immovable properties in question or whether it merely refers to what the appellants alleged were past transactions which have been entered into by the parties, then, going by the words used in the document, they indicate that the words are intended to refer to the arrangements allegedly which the parties made in the past.’

As per the bench, the document did not purport to by itself create, declare, assign, extinguish or limit right in properties. Therefore, the Khararunama might not attract Section 49(1) (a) of the Registration Act.

In the present case on November 17, 1980 a partition list was executed by the appellants and the fact of partition which was already effected was recorded.

The respondent one Korukonda Annapurna Sampath Kumar and his wife raised a contention before elders of the family that the portion given to them was insufficient.

Later the respondents & the appellants settled that the respondent would give his portion to second appellant and his one third portion in Nadava Margam to the appellants and in consideration the first appellant (Korukonda Chalapathi Rao) and second appellant had to give Rs 25000 and Rs 75000 to the respondent. After paying the said amounts, a Kharurunama dated April 15, 1986 was executed recording the facts.

Further, in December 1993, the respondent and his wife informed the appellants that they would vacate the portion in the second appellant’s house and leave the same but demanded some more money as they intended to vacate the property.

On December 8, 1993 the second appellant paid Rs 2, 00,000 to the respondent and the respondent on the same day issued a receipt to the second appellant. Allegedly the respondent vacated and left the portion in his occupation in the house of the second appellant and shifted to a rented portion.

The respondent instituted a suit seeking declaration of title over the plaint schedule properties (listed in schedule F of the partition deed dated November 17, 1980) and for eviction of Korukonda Chalapathi Rao. The relief of consequential perpetual injunction was also sought against Chalapathi Rao.

In the suit the respondent argued that while he was in hospital in patient for treatment of his liver ailment, the appellants allegedly obtained his signatures on papers and made up the Khararunama dated April 15, 1986 and alleged receipt dated December 12, 1983. He also contended that the appellants were in occupation of his property.

Thereafter, on their refusal to vacate and after exchange of notice, the suit respondent filed the suit.

The trial court had rejected respondent’s objections to marking the documents and posted the matter for evidence of Defendent Witness1 for marking the said documents.

The Telangana High Court on April 22, 2016 found that the documents which were the unregistered family settlement “Khararunama” and receipt of Rs. 2,00,000/- (Rupees two lakhs) by the respondent, in the absence of registration and not being stamped the documents were inadmissible. The appellants therefore approached the Top Court.

The Counsel ppearing for the appellants Advocate Vijay Bhaskar submitted that,

“the High Court erred in not considering the family settlement “Khararunama” and receipt dated December 8, 1993 in accordance with well-established principles relating to the law of family settlement /family arrangement.”

The Counsel further relied on the Supreme Court’s judgement in Subraya M.N. v. Vittala M.N. (2016) 8 SCC 705 and asserted that there could be an oral relinquishment of the share of the family members in the family settlement and family arrangement.

The Counsel also contended that if the terms of the said family settlement was reduced into writing, and it was only a memorandum executed subsequently recording the terms of the oral family settlement, then, no registration was needed.

On the contrary the counsel appearing for the respondents, Advocate Venkateshwar Rao submitted that,

“the family settlement dated April 15, 1986 required registration u/s 17(1)(b) of the Registration Act,1908 and under the said settlement the appellant had to pay certain sum to the respondent. He further contended that the document could come into force after the receipt of the consideration.”

Taking into the account the factual matrix of the present case apropos appellant(s) contention that the Khararunama dated April 15, 1986, but could be looked into to prove the conduct of the parties and the nature of the possession which was enjoyed by the parties, the bench  observed that,

“The law is not that in every case where a party sets up the plea that the court may look into an unregistered documents to show the nature of the possession that the court would agree to it. The cardinal principle would be whether by allowing the case of the party to consider an unregistered document it would result in the breach of the mandate of the Section 49 of the Registration Act.”

The Bench further observed that since the Khararunama by itself, does not ‘affect’ immovable property, as already explained, being a record of the alleged past transaction, though relating to immovable property, the Court held that there would be no breach of Section 49(1)(c), as it was not being used as evidence of a transaction effecting such property.

“However, being let in evidence, being different from being used as evidence of the transaction is pertinent [See Muruga Mudallar (supra)]. Thus, the transaction or the past transactions cannot be proved by using the Khararunama as evidence of the transaction. That is, it is to be noted that, merely admitting the Khararunama containing record of the alleged past transaction, is not to be, however, understood as meaning that if those past transactions require registration, then, the mere admission, in evidence of the Khararunama and the receipt would produce any legal effect on the immovable properties in question,” bench observed.

 

[Case Title: Korukonda Chalapathi Rao & Ors v Korukonda Annapurna Sampath Kumar]

Access Copy of Judgment Here